Standard fear extinction relies on the ventromedial prefrontal cortex (vmPFC) to form a new memory given the omission of threat. Using fMRI in humans, we investigated whether replacing threat with novel neutral outcomes (instead of just omitting threat) facilitates extinction by engaging the vmPFC more effectively than standard extinction. Computational modeling of associability (indexing surprise strength and dynamically modulating learning rates) characterized skin conductance responses and vmPFC activity during novelty-facilitated but not standard extinction. Subjects who showed faster within-session updating of associability during novelty-facilitated extinction also expressed better extinction retention the next day, as expressed through skin conductance responses. Finally, separable patterns of connectivity between the amygdala and ventral versus dorsal mPFC characterized retrieval of novelty-facilitated versus standard extinction memories, respectively. These results indicate that replacing threat with novel outcomes stimulates vmPFC involvement on extinction trials, leading to a more durable long-term extinction memory. Psychiatric disorders characterized be excessive fear are a major public health concern. Popular clinical treatments, such as exposure therapy, are informed by principles of Pavlovian extinction. Thus, there is motivation to optimize extinction strategies in the laboratory so as to ultimately develop more effective clinical treatments. Here, we used functional neuroimaging in humans and found that replacing (rather than just omitting) expected aversive events with novel and neutral outcomes engages the ventromedial prefrontal cortex during extinction learning. Enhanced extinction also diminished activity in threat-related networks (e.g., the insula, thalamus) during immediate extinction and a 24 h extinction retention test. This is new evidence for how behavioral protocols designed to enhance extinction affects neurocircuitry underlying the learning and retention of extinction memories.